May 4, 2004

Some Krugman thoughts...


The Krugman Truth Squad is on hiatus these days—because they're economists, and Paul Krugman hasn't written anything solid on economics for a long long while.

But I'll just take a slice or two of off Krugman's latest column, Battlefield of Dreams:

...Less has been said about how dreams of making Iraq a showpiece for free trade, supply-side tax policy and privatization — dreams that were equally oblivious to the country's realities — undermined the chances for a successful transition to democracy.

A number of people, including Jay Garner, the first U.S. administrator of Iraq, think that the Bush administration shunned early elections, which might have given legitimacy to a transitional government, so it could impose economic policies that no elected Iraqi government would have approved. Indeed, over the past year the Coalition Provisional Authority has slashed tariffs, flattened taxes and thrown Iraqi industry wide open to foreign investors — reinforcing the sense of many Iraqis that we came as occupiers, not liberators...

So where's the evidence? Where are the facts? We don't need no facts, we're the NYT!

From what I've read, low-priced goods are flooding into Iraq, and many people now have money to spend, who didn't before. Cars, sat dishes, cell phones, are selling like hotcakes. Police, teachers, government employees all have greatly increased salaries. Our planned spending on various projects has been horribly delayed by State Department rules of a sort that Krugman doubtless supports. But it's starting to kick in, and unemployment is falling. Exactly who's complaining? How does K know that "no elected Iraqi government would have approved?" Instinct? Actually any smart government would want to have economic reforms made now, because they will be much harder to do once voters have a say.

But then Krug gets to what's really bothering him. PRIVATIZATION! He hates it like poison. (Which is just what it is to his dreams of being a kingpin in a big-spending Democrat administration.) He mentions various private contractors in a way that just assumes that they perform worse than government doing the same job. No evidence needed, of course, Merely mentioning "profits" and insinuating political connections (Republican) is enough.

Of course the prisoner-abuse scandal is handy to taint all:

...We don't yet know for sure that private contractors were at fault. [at Abu Ghraib prison] But why put civilians, who cannot be court-martialed and hence aren't fully accountable, in that role? And why privatize key military functions?...
Why? Well, for one thing you can lay them off when the war is over. When the contract expires the taxpayer's expense ends. And it frees up soldiers for other jobs. Like actually hunting for the bad guys.

And Krugman doesn't mention that the contractors doing things like body-guarding or interrogation are almost all retired US military personnel. Also that those aren't key military functions. (For key functions, think, "killing people and breaking their things.")

Posted by John Weidner at May 4, 2004 1:59 PM
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